What Determines the Location Choice of Foreign Investment in R&D ?

There is an ongoing discussion on this blog about attracting foreign investment in R&D in Ireland. In a recent research paper we analysed the location decisions of foreign affilates in the R&D sector incorported in the European Union over 1999-2006. Our research results suggest that, on average the location probability increases with market potential, agglomeration economies, R&D intensity and proximity to centres of  research excellence.  The determinants of the location choice of R&D foreign affiliates vary depending on the country of origin of the foreign investor. Thus, it appears that agglomeration externalities and business R&D intensity had a higher positive effect on the propensity to locate in an EU region in the case of multinationals from North America in comparison to European based multinationals. Proximity to centres of research excellence had a positive and significant effect on the location choice for North American R&D multinationals but no significant effect in the case of  European R&D multinationals.

Our research results suggest a number of policy implications. First, policy aiming at increasing the R&D intensity of regions are likely to foster the attractiveness of regions to R&D foreign investment. Second, positive externalities from clustering of R&D foreign affiliates outweigh competition effects. Third, given the heterogeneous behaviour of foreign investors, differentiated policy depending on target partner countries can increase the success of such policies.

The Science of Spending Stimulus Money Wisely

The New York Times carries an interesting article on the role of spending on science projects as part of a stimulus package.

More University Rankings

Quantitative analysis of science and technology is  a growing research area.  There are two university rankings based on bibilometric indicators which are worth watching:

Cybermetrics Lab has this university ranking for Top 100 universities in Europe, published in July 2009. TCD is the only Irish university in this list, ranked 49th in Europe and 169th in the world ranking. In the world ranking UC Cork is 393rd and UCD is 457th. The world rank of Irish universities can be found here.

The Centre for Science and Technology Studies of the Leiden University has constructed several university rankings based on scientific output. While based on the same data and methodological background, rankings differ depending on the focus of the impact – indicators. The Leiden ranking results 2008 can be found here.

The Northern Ireland economy

As far as I know, there has not been a single blog relating to Northern Ireland since The Irish Economy blog began earlier this year. Northern Ireland is having a relatively good recession for various reasons on which I do not wish to dwell. However, it has serious long-term problems which have been addressed in a report commissioned by the devolved economy Minister. The report is available here. What will interest readers of this Blog was that 4 out of the 5 report authors are economists, of which I am one.

In essence, the Northern Ireland economy has operated under wartime conditions for nearly four decades. Public sector output amounts to around 60% of gross value added (the regional equivalent of GDP). More specifically, industrial policy has consisted of providing large scale grants to both inward investors and indigenous firms. This has been partly successful: employment growth has been high in the last decade and at the peak of the recent boom, the unemployment rate was hovering just above 4% as in the Republic of Ireland case. What was different was that productivity growth was low to non-existent. Consequently living standards have not converged on the UK and have diverged markedly from the Republic of Ireland and other successful countries.

THE-QS University Rankings 2009

The new rankings are out. All Irish universities are up. TCD at 43, UCD at 89.

To pre-empt some critique: No ranking is perfect, but each imperfect ranking correlates with each other imperfect ranking. Two universities in the top 100 is not at all bad for a country that has far less than 2/100 people in the OECD, let alone the world.